Malaysia's power plants are facing a prolonged gas shortage, denting profits for state-linked power firm Tenaga Nasional that has to buy more expensive fuel distillates to keep generating electricity, the Business Times reported.

The paper on today quoted Tenaga Nasional CEO Che Khalib Mohamad Noh as saying the power sector receives a third less of what it has been allocated by Petronas as the state

oil firm has been shutting its gas facilities for frequent maintenance.

"It can't go on like this. Probably we can avert (any problems) this time but I don't know how many times we can be lucky," Che Khalib said.

Petronas allocates 1,350 million standard cubic feet per day (mmscfd) of gas to the power sector. The Business Times said supply has gone below 1,000 mmscfd since the start of 2011 and now hovers between 900-950 mmscfd.

Che Khalib said the Tenaga has to spend an additional RM400 million per month to buy alternatives like distillates and medium fuel oil.

Fast draining Tenaga’s cash flow

Last week Tenaga put out a tender for 130,000 tonnes of fuel oil, making it the third time it has gone out into the markets to buy fuel oil.

It bought about 145,000 tonnes and 65,000 tonnes on two occasions this year, and also imported electricity from neighbouring Singapore.

"It (the gas shortage) is fast draining our cash flow. It is already eating into our reserves," Che Khalib said.

In its third-quarter financial results, Tenaga posted a net loss after it spent an additional RM1.3 billion on fuels and Che Khalib said he expects full year numbers to be lower

than last financial year.

- Reuters